NOVUS - FDD UFOC ITEM 7 Detail

7.������� ESTIMATED INITIAL INVESTMENT

YOUR ESTIMATED INITIAL INVESTMENT - LEASED RETAIL LOCATION FRANCHISE

YOUR ESTIMATED INITIAL INVESTMENT - MOBILE FRANCHISE

(1)                
See Item 5 for further information. Existing stand-alone franchisees purchasing an additional franchise pay an Initial Franchise Fee of $5,000. Except in -limited oiroumstanoes;-tThe Glass Repair only franchise is offered to you only if you are reacquiring your existing franchise, and because you are in business at the time you reacquire your franchise, you should own or lease all of the assets and vehicles necessary to operate the Glass Repair only franchise.

(2)                 This fee includes Glass Repair and Glass Replacement training for up to 2 people who take the training at the same time. The low estimate for an affiliate license assumes that you only initially take the Glass Repair training because either you do not offer Glass Replacement services, or you have an experienced auto glass replacement installer certified by the NGA already on staff when you begin operating your Novus� business and that person passes our glass replacement test. The Initial Training Fee could also be lower for a stand-alone franchisee if the owner/operator is already an experienced NGA certified auto glass replacement installer who passes our glass replacement test.

(3)                 These are the estimated salaries, fringe benefits, travel, auto rental, food, and lodging expenses for 1 to 2 people to attend our required training programs. You must send a minimum of 1 person and a maximum of 2 people to each glass repair training and glass replacement training. The expenses are lower for an affiliate eo-brand-licensee because the training is shorter, and if you either have an experienced NGA certified auto glass replacement specialist on your staff, or do not initially offer glass replacement products and services, you will not need to initially take this training. The expenses all franchisees and licensees actually incur could also be higher than our estimate depending on the distance the employee travels, the mode of transportation, your policies relating to expense reimbursement, time of year, failure to purchase airline tickets in advance, hotel selection, and location of your business.

(4)                 You must either lease or purchase your fixed retail location, which will range from 1,500 to 5,000 square feet in size. If you purchase your fixed retail location, then the cost of the real estate and building will vary depending on the market, location, size, and other economic factors. Rental rates vary considerably and depend on geographic location, size, location, market conditions, and other economic factors. We estimate that your monthly rent will range from $5 to $20 per square foot per year in most areas of the United States. Thus, the rent for a 2,500 square foot building will be between approximately $1,040 and $4,170 per month. The amounts in the table reflect the rent for the first month based on these estimates.

(5)                 You will need to make leasehold improvements to your building. Depending on the terms of your lease, some or all of these costs may become part of your monthly lease payment. If you are converting your existing business to a Novus� business, your costs will usually be less than the amounts set forth in the above tables because you will (a) have acquired some of the furniture, fixture, and equipment, (b) not be required, in most cases, to make extensive leasehold improvements to. the existing premises, and (c) already own vehicles.

(6)                 The low estimate assumes you lease the glass repair equipment and do not prepay your lease.

(7)                 You must purchase your signage from us when you sign your Franchise Agreement, unless you have made arrangements to purchase it elsewhere, in which case you must show us a paid receipt within 30 days after you sign the Franchise Agreement.

f7)(8) The stated amount is per vehicle. You must purchase or lease 1 white vehicle (new or used) that complies with our standards and specifications. If you are converting your existing business to a Novus� franchise or license and have existing facilities, then you may already have a vehicle that complies with our standards₇ although any vohiclo that io not whito in oolor must bo painted white boforo you begin using it in your Nevus -business.

(8) (9)�� This is for the initial supply of windshields and other automotive glass, adhesives, clips, and other materials

needed to operate the franchise for 1 month. The estimate assumes close proximity to wholesale facilities to serve the franchise or licensed business, which lowers the required inventory.

(94(10) You must lease or purchase computer equipment designated or approved by Novus to operate your point-of-sale and accounting software. The cost of your computer equipment will be between $ 1,250 and $2,000. Your actual cost for computer hardware will be lower or there may be no expenditure required if, before you acquire the franchise, you lease or own computer hardware that meets the requirements of the manufacturer of the software you use. For an affiliate oo-brand license that already has sufficient computer equipment, you may not need to incur this cost.

ftO)(ll) You will need to purchase point-of-sale software and accounting software for use in your business. The package we currently recommend has an initial cost of up to $1,350, and annual update fees of between $900-$ 1,000. For an affiliate co-brand license that already has sufficient accounting software, you may not need to incur this cost.

(44)(12) You may attend a one-day information and orientation meeting (which we call "Discovery Day") at our Novus''''offices in Minneapolis, Minnesota. There is no fee for this meeting, but you must pay your travel costs and other expenses for attending. The additional funds estimate includes these costs. The indicated amounts represent a 3 month estimate of operational costs that are not itemized above and include employees'' salaries and fringe benefits, uniform cleaning, telephone expenses, lease payments for repair equipment, legal and accounting expenses, general operating costs, the set-up fee to establish your home page on our website, and the cost of a background check you must pay for before we will grant you a franchise, and other miscellaneous expenses. We have relied on our experience in the glass repair and replacement industry in formulating these estimates. Your actual requirements will vary depending on the sales generated by your business during the initial stages of operation, the size of your franchise, your overhead costs, number of employees, and other economic factors. Your personal living expenses are not included in these estimates, since they are entirely within your control.

(W)(13) These estimates represent your total initial investment to begin operations, and do not include any interest costs or principal repayments. We recommend that you have enough cash available before starting your business to meet your initial investment and working capital requirements. If you must obtain financing for some or all of your capital needs, then your initial cash requirements will be reduced accordingly; however, your future monthly cash needs will increase by the amount necessary to pay the interest costs and principal repayments required under the terms of your financing arrangement.

(13)(14) All fees and payments are nonrefundable unless negotiated differently with a supplier.